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The Case for Faith-Based Competitive Advantage

Robert Henkel, president and CEO of Ascension Health, the delivery subsidiary of Ascension, has helped lead the transformation of the nation’s largest Catholic healthcare system as it fulfills its mission in a changing healthcare environment.

Few industries have undergone as much upheaval in the last decade as healthcare. Staying ahead of advancing technology, evolving regulation, and increasing customer advocacy requires continual organizational transformation. This might seem an unlikely environment in which a faith-based organization could flourish. But for Robert Henkel, president and CEO of Ascension Health, the delivery subsidiary of Ascension, religious identity and industry innovation work side by side.

Ascension Health is a network of about 2,500 hospitals, outpatient centers, and senior and long-term-care facilities in the U.S. (headquartered in St. Louis, Mo., it has facilities in 24 states and Washington, DC). Its parent, Ascension, also includes an information-services group, an insurance company, a venture capital fund focused on healthcare technology, and an investment management company. All these groups are formally committed to creating a spiritually centered healthcare organization, as one might expect from the largest Catholic healthcare organization in the United States.

Ascension Health is explicitly inclusive, open to a variety of religious beliefs and backgrounds. It is also deeply oriented toward community. Henkel says Ascension’s mission has always embraced building bridges in its communities to better serve patients, employees, and society as a whole.

In line with its faith-based nature, Ascension routinely does things that a conventional healthcare provider might not. These include developing community wellness initiatives to address health and social needs; using technology and social media to generate a constant feedback loop with customers and associates; and actively connecting with its caregivers through its spiritual guidance, fellowship, and support, which Henkel believes prevents burnout and brings the joy back into healthcare.

As part of PwC’s 2016 CEO Survey, s+bspoke with Henkel in late 2015 about Ascension’s ongoing reinvention and how he sees the U.S. healthcare landscape continuing to evolve and better serve consumers. This interview demonstrates how a mission-driven organization with a social conscience can remain relevant in an industry undergoing rapid disruption.

S+B: What is a faith-based organization, and what does it mean to be one in an industry such as healthcare?
HENKEL: We are a Catholic health ministry, so our practices and mission are rooted in the loving ministry of Jesus as healer. We commit ourselves to serving all persons, with special attention given to those persons who are living in poverty and are most vulnerable. The ministry is dedicated to spiritually centered, holistic care, which sustains and improves the health of individuals and communities. We are inclusive. We’re here to serve all people; to provide compassionate, personalized care to all, with special attention to those who are struggling the most.

S+B: Some might say there’s a gap between that purpose and the secular assumptions of an industry like healthcare. Do you see Ascension as bridging that gap?
HENKEL: Faith‑based organizations do bridge gaps. Pope Francis, in his recent visit to the United States, talked about the fact that faith‑based organizations have an obligation to overcome disparities, and differences between people, whether they be economic, environmental, or political. In fact, he made a statement during his visit about how a church with closed doors turns its back on the church’s mission and values, and rather than being a bridge, becomes a barrier.

Ascension, as a faith‑based organization — and as one that is dedicated to treating people without regard to background, and without regard to faith perspective — has the ability, because of that social conscience, to be a bridge in the communities that it serves. A very important part of our mission statement says we are advocates for a compassionate and just society — not only in our actions but also in our words.

S+B: What kinds of activities do you get involved with?
HENKEL: We look to our communities and what needs aren’t being served, and we jump to meet them. We don’t wait for communities to come to us. We’re not just meeting our charitable obligations because of our tax-exempt status; we seek out those community needs that aren’t being met.

For example, we ask all of our ministries around the country to do something we call Medical Mission at Home. They look at the needs in the community and then create a day to bring people in to do child dentistry, foot care, or something else that’s very important to the health needs of that community.

We also look for ways to meet needs that have nothing to do with health issues. Social needs affect health. In Detroit, we’ve spent time developing businesses. We were influenced by C.K. Prahalad’s book The Fortune at the Bottom of the Pyramid [Wharton School Publishing, 2005]. We embedded people in very poorly served communities, got the community members involved to say what their needs were, and then worked with them to develop actual business plans, which we funded, in small amounts — maybe $50,000 each. One of them is a healthy dollar store in Flint, Mich. It’s a place that offers fresh produce and food at affordable prices in an area that was formerly a “food desert.” This is a great example of how we take our mission, put it into the community, make it real, and make it meaningful.

S+B: What advice would you give other executives trying to embark on a path like Ascension’s?
HENKEL: Learn how to collaborate. This skill set is not embedded in our industry. We’ve tended to be competitive rather than to think about how we can combine our gifts — the expertise that we have — with the expertise and resources of healthcare-industry competitors or other social service agencies in our community. In our case, as a Catholic‑based organization, we try to collaborate with Catholic Charities and local parishes. We seek to interact in a way that raises the value of the services we offer and that increases our ability to serve the community. This, in turn, helps to meet the broader needs of people in a different way. Being willing and open to that type of collaboration is the most important piece of advice I could give someone.

S+B: Ascension has gone through a lot of organizational change since the U.S. Affordable Care Act was passed. Five years from now, what will your company look like?
HENKEL: I often hear this question, but we haven’t come up yet with language to describe what we’re going to look like in five years. Traditional lines — bright lines that distinguish a provider of healthcare services from a payor — are blurring rather quickly. In the future, Ascension won’t be known simply as a provider or a payor. We will be blending those components and also adding other services.

What does one call that type of organization? I don't know yet, but we will continue to blur lines. We will continue to develop the components of our system that we need to meet and navigate some of the challenges and opportunities that exist in a changing environment, whether that’s the payment system, the regulatory system, or the economic requirements to allow businesses to thrive in the communities that we serve.

S+B: That type of change can be challenging for people who work in a ministry. How do you bring them along on this journey?
HENKEL: Change is always anxiety-producing. The less you understand the change, the less you understand how to navigate it and the higher the level of anxiety. The higher the level of anxiety for our staff and for those who serve within our ministry, the more difficult it is for them to help the people we serve.

Thus, we asked ourselves, “How do we communicate with 160,000 associates across the country to bring them along with the change so they can just understand it?”

We discovered a visual way to do that, which we call maps. These are visuals that reflect what the healthcare industry looks like today, what we envision for the healthcare industry tomorrow, and what will get us from one place to another. With a series of questions and a very standardized process, we have put that out in front of every Ascension associate around the country. The understanding we gain has really changed the nature of our internal discussions.

Next, there are the constant communication and feedback loops that we use to say, “Here’s what we’re doing (including our business and medical results), here’s how it connects back to that bridging strategy that we were talking about, and here’s where we think we’re going to end up.” We use social media and our own information technology [to communicate this]. By doing this, we lower the anxiety level, we help people feel good about what they’re doing, and we help them understand how they can actually engage in this journey along with their fellow associates and colleagues across Ascension.

Some of our most significant investments are our ongoing “formation programs” for middle managers across the country and for our executives. We have two-year and one-year programs, built on the theological foundation of Catholic healthcare. Attendees learn who we are, what we’re doing, and why we’re doing it. It is an opportunity for our colleagues from different parts of the country to get to know each other and work together. Relationships that get formed through those kinds of programs not only overcome lots of tension and disagreements, but give people the feeling that they know they have colleagues they can go to who they can work with, and who understand each of them as a person.

We’re building relationships that will be important across this organization to navigate the changes in the future. That may sound like a soft-sided investment, but I believe it is a very important one that will have great financial returns for us.

We are also making what people might consider hard investments. We are investing in tools to spread information very quickly so that we can share our best practices, whether they be clinical or administrative, and learn from each other. We are determining whether we have the right kind of data analytics to engage with our consumers on an ongoing basis. We are using social media and mobile apps [to engage with customers].

S+B: What is your view of the growing number of mergers and acquisitions in the healthcare industry?
HENKEL: Consolidation in this industry will continue. It will improve access [to healthcare] for the consumer. But any particular consolidation must decrease the true cost of healthcare, and it must also add value — in other words, it must improve the outcomes. It must produce healthier people in this country, a more productive workforce, and [better] relationships [among organizations] within the framework of their community.

That outcome must be tested and, in some cases, regulated as we look to the future. I believe consumers ought to be engaged in the consolidation discussions. They’re ultimately going to be the ones affected.

Another outcome of consolidation is that [companies such as Ascension] will exit markets where they’re no longer needed. When we’re looking in a market for consolidation, we’re asking ourselves, “Will this improve access? Will this improve quality? Will this decrease the cost of healthcare in this community?” If we can answer all of those questions “yes,” then the deal is something that makes sense for the consumer.

S+B: Do you think we’re entering an era of democratization of healthcare, an era with more consumer engagement?
HENKEL: We’re not entering the era. We’re already there. People are [taking] more responsibility for their own health. Consumer information about healthcare is literally at everybody’s fingertips. It doesn’t take more than five seconds on the Internet to get information that has both price transparency and more and more data about outcomes. People can connect with others who have the same disease. They often learn more from one another than they do from the clinicians treating them, because the conversations are different.

S+B: How do you promote this openness and still maintain the quality of information?
HENKEL: There is a lot of information out there, and not all of it is good. That can be frustrating to the caregivers, particularly the physicians who may find that everybody who walks into their office is bringing in information that they’ve printed off the Internet about something that may or may not be credible. Watch television for a few minutes, and you’re going to see probably a half dozen pharmaceutical advertisements, so everybody comes in with the prescriptions that they need, and that’s frustrating to the physicians.

“We’re not entering the era of democratization of healthcare. We’re already there.”

Our role [at Ascension] is to be a source of information, particularly as we move into population health [improving health at the group, community, or societal level] and as we work with people over longer periods of time. We’ll push out that information through apps or through other technologies to those we’re serving. We should be a resource for answering questions and even directing them to other resources. By doing that, we can lower frustration levels for consumers. Then, perhaps, people can meet with their doctors as consumers with good, solid scientific information rather than with just bits and pieces that may not make sense.

S+B: We hear a lot about physician and nurse burnout. Is that an issue at Ascension?
HENKEL: Our organization may have a competitive advantage because of who we are and what we do. Our mission centers us as an organization. It provides a centering and a calmness for our associates, too, because they know what we’re doing. Our ministry and mission have been going on for hundreds of years.

Because of that, our associates have joy in treating people, even with all of the frustrations and craziness that may reflect uncertainties in the environment. As an organization, we have to continuously give all of our associates — particularly our caregivers — the support that they need to allow them to keep stress levels down. We have retreats. We have formation programs for our physicians, nurses, and associates that take them away from their day-to-day life and allow them to sit back and remember why they are here, why they chose this profession. And it really is very nurturing for their own spirituality, and ultimately for what people would describe as the joy in caring for someone else and making a difference in someone else’s life.

Author Profile:

Benjamin Isgur is the leader of PwC’s Health Research Institute. He also consults with healthcare systems, trade associations, and policy groups on strategic planning, industry intelligence, and trends.

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